What is Bitcoin Mining?
Bitcoin mining is the process by which new bitcoins are entered into circulation, but it is also a critical component of the maintenance and development of the blockchain ledger.
It is performed using very sophisticated computers that solve extremely complex computational math problems.
Key TakeAways
- By mining, you can earn cryptocurrency without having to put down money for it.
- Bitcoin miners receive Bitcoin as a reward for completing "blocks" of verified transactions, which are added to the blockchain.
- Mining rewards are paid to the miner who discovers a solution to a complex hashing puzzle first.
- You need either a GPU or an application-specific integrated circuit (ASIC) in order to set up a mining rig.
Also read: Some Useful PC Tricks you should know...
How to Mine Bitcoin?
Miners are getting paid for their work as auditors. They are doing the work as auditors. They are doing the work of verifying the legitimacy of Bitcoin transactions.
Once miners have verified 1 MB (megabyte) worth of Bitcoin transactions, known as a "block" those miners are eligible to be rewarded with a number of bitcoins.
But after all that work of verifying transactions, You might still not get any bitcoin for it!
To earn bitcoins, you need to meet two conditions. One is a matter of effort; one is a matter of luck:
- You have to verify -1MB worth of transactions. This is the easy part.
- You have to be the first miner to arrive at the right answer, or closest answer, to a numeric problem, This process is also known as proof of work.
